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Council tax payers in England are losing out on billions of pounds of money for public services because of the Barnett formula – the unfair way Scotland's funding arrangements are calculated. English councils are angry that Scottish local authorities are benefiting from the unfair terms of the Barnett formula. The formula sets how much Scotland can receive every year from the Treasury for public spending. In a letter to the Daily Telegraph, Sir Merrick Cockell, chairman of the Local Government Association, criticises the formula as "grossly unfair, divisive, and outdated". Research which will be presented to the LGA's board next week shows that if the formula was reformed it would if see an additional £2.6billion diverted to help English councils. One LGA source said: "If Scotland was funded on a fair basis, we would have the money we need to plug the current adult social care funding gap." In the Telegraph letter, Sir Merrick Cockell, attacks the "unfairness and plain illogicality" of the formula. He says: "The formula was just an over-simplistic way of settling the devolved countries' budgets with a minimum of interdepartmental negotiation and fuss. "But now its unfairness and plain illogicality mean it is time to move on. Unlike every other part of the public sector, the Scottish, Welsh and Northern Irish governments get their money automatically." Sir Merrick complains that "whenever an English department gets a change to its budget, the other countries of the Union get an automatic share, with no questions asked". He is particularly incensed that when the Coalition froze council tax for English councils, an extra £67.5million was given to Scotland, even though its government had already announced a freeze He adds: "Therefore Scotland got extra money this year because English councils were being paid to freeze their council tax – even though Scotland already had a council tax freeze." The way the formula works means that Scotland and Wales receive money because the Crossrail tunnel is being built in London, he says. The formula was devised by Lord Barnett, the Labour chief secretary to the Treasury, in the 1970s as a short-term measure. He has since suggested it should be reformed. Sir Merrick adds: "Lord Barnett himself never expected the formula to last more than a few months, let alone 30 years. It has become grossly unfair, divisive, and outdated. Let's find a new formula in 2012 and put the inadequacies of Barnett behind us." The formula is devised to ensure that changes in public expenditure in one geographical area lead to alterations elsewhere proportionate to population rather than need.
 Comments (2)Subscribe to this comment's feedShow/hide comments What will happen to the Barnett Formula if / when Scotland get Independence?
Question's in the title - I have no problem with Scotland becoming independent so long as England don't have to continue subsidising their standard of living.
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January 11, 2012
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Ten to twenty billion a year saved in susidies. Smaller payments to Brussels due to the Scots leaving the Uk. Goverment jobs absorbed back into England from Scotland. Fair charges for Scottish use of English infrastructure. Reduced defense costs. Seems to me that England will be the one to benefit from any break up of the Union. A break up, in practice and in definition can only serve to promote Englishness to the sleeping English public. Its our chance to regain and celebrate who we are and what we stand for! Well done that man Salmond. A better friend to the English cause and national identity than any Eton educated politician.
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January 22, 2012
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England loses £2.6b in Services to Scotland
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